By ANN PIERCEALL

Herald-Whig Staff Writer

HANNIBAL, Mo. -- The Hannibal Board of Public Works was hit last month with an unexpected bill of more than $400,000 by AmerenUE as part of "congestion charges" for use of the electricity grid overseen by the Midwest Independent Systems Operator (MISO).

Hannibal Board of Public Works General Manager Don Willis said the city and six others who also receive power through a purchase contract with AmerenUE are disputing the amount, which amounts to about a half-month's bill for each city.

"All of us are sticking together, and none of us are going to pay the bill until there's proof," he said. "It's going to be a killer to our budget."

Willis said the Board of Public Works will pay for whatever the final charge is through its regular budget by cutting back. No rates will be increased to make up the differences.

Willis said a couple of employees have resigned and won't be replaced, and some maintenance projects that had been planned this year will be delayed.

"We just have to re-budget next year to do these things we wanted to do this year. We'll just have to cut them out," he said.

According to AmerenUE, MISO made a mistake in billing dating back to January 2007. The total the city was notified it owes was $432,529.

Independent system operators, like MISO, were established about 10 years ago to stabilize the nation's power supplies after a series of power outages and brownouts demonstrated what the federal government perceived as a weakness in the nation's energy grid system. At that time, the electrical grid was controlled by separate suppliers for different regions, each with its own set of rules.

ISOs "regulate and control the grid, and to do that, they charge rent on the transmission lines," Willis said.

Suppliers and users have to provide a year ahead of time how much energy they will use. "Congestion charges" come into play if those estimates are exceeded.

This is not the first time MISO has made a billing mistake. When MISO started almost 10 years ago, charges were expected to be between $10,000 and $15,000 a month. Instead, Willis said the city was charged between $100,000 and $200,000.

MISO charged Hannibal $350,000 in 2006 before Ameren discovered the errors.

"We had close to a million dollars invested in MISO before Ameren realized there'd been a mistake," Willis said.

Willis said the city and other municipalities questioning this latest billing error met with AmerenUE last week and were told the information was being double checked. Revised numbers were expected this week.

Hannibal's new contract with Ameren Energy Marketing, which goes into effect Jan. 1, eliminates further charges like this from MISO. The city will then be charged a flat $2 per megawatt hour fee.

Since Jan. 1, 2007, Hannibal Board of Public Works has implemented four rate increases totaling 30 percent. Another 38 percent increase will go into effect in January.

--apierceall@whig.com/(573) 221-5879